Ballmer: Microsoft Wants a Bigger Piece of the Software, Services Pie

MINNEAPOLIS—Microsoft may love its partners. But that isn't stopping the company from continuing to encroach on areas that have traditionally been its partners' turf.

At the final day of Microsoft's worldwide partner conference here on Sunday, Microsoft CEO Steve Ballmer kicked off his morning keynote with repeated shouts of "I love you, partners!"

But shortly thereafter, Ballmer warned the company's channel partners that Microsoft has its sights set on some markets that partners have had to themselves until now. Ballmer said that Microsoft is planning to make deeper forays into the business intelligence, document workflow, security and managed services arenas in the coming decade.

Ballmer's revelations should come as no surprise to company watchers. Microsoft increasingly has been adding analytics capabilities to more of its Office, server and tools products in the past couple of years.

Company officials have acknowledged they are planning to add document-workflow and security features to Office 12 and Windows Longhorn, which are both due next year. And Microsoft's consulting services division has been testing the first of what could become a family of managed services that Microsoft is expected to start rolling out later this year.

"Things will evolve," Ballmer told partner show attendees. "Our product line and spaces where we offer solutions like business intelligence and security need to evolve.

"We need to evolve together," Ballmer continued. "Neither you nor we should be 100 percent committed to doing things exactly way we do today 10 years from now. We need to commit to continue to evolve, but evolve together. And we need to make sure we respect our mutual skills and talents and mutual opportunities."

As part of his keynote, Microsoft invited three partners to participate in an on-stage panel. Two of the three asked Ballmer about Microsoft's intentions regarding competition with its partner base.

"We [Microsoft] are extending the footprint of our horizontal, very general business products," Ballmer acknowledged. "But we don't think that should be an issue for us and the partners in this room. Maybe an issue between us and Oracle, or us and SAP, but not between us and partners in this room."

On the line-of-business applications front, Microsoft has been trying to steer its partners to build on top of its ERP (enterprise resource planning) and CRM (customer relationship management) products, as opposed to continue to develop their own application technology. Ballmer said Microsoft's goals is to continue to work equally well with partners whether they integrate vertically with Microsoft's stack or prefer to build horizontally.